Monday, March 07, 2011

After letting a highly destructive budget fight fester far too long, the White House finally stepped in late last week to negotiate with the House, which wants to eviscerate nondefense spending. Senate leaders still seem shell-shocked by that breathtaking ruthlessness, and have pleaded with the administration for help in pushing back. The White House needs to do so, and firmly.

Notice the Age of Civility language here: “eviscerate” “shell-shocked” “ruthlessness”. All because the Republicans want to reign discretionary spending back to the level of ... actually 20% more than 2007 and only 5% less than the President’s budget request. They are mostly cuts in the Washington sense of cutting the planned increase in spending. Oh, the humanity!

But this is not a moment for another difference-splitting deal. The House wants to carve $61 billion out of the government for just the next seven months, which would throw hundreds of thousands of people out of work and kill off scores of vital functions. Many of them, like funding for health care reform, environmental regulation and Planned Parenthood, are on the Republicans’ ideological hit list. The latest deadline for an agreement is March 18; without one, the government would close.

This is packed with bullshit. As I noted below, the projections that a 1.6% cut in government spending will throw “hundreds of thousands” out of work is complete nonsense, based entirely on the latest unsubstantiated emission from Mark Zandi. Zandi, to remind you, is chief economist of the organzation that gave AAA ratings to shitty mortgage-backed securities, thought the housing crisis was over four years ago and constructed the current stimulus plan which predicted 8% peak unemployment.

Keep in mind something else—the idea of the stimulus was that the new spending was supposed to be temporary. I never bought this for a second, and said so at the time:

This also exposes the lie that is the number $819 billion. Raise your hand if you think the Democrats, after raising the DOE budget to $146 billion, are going to cut it back to $60 billion. Yeah, I didn’t think so. If we even assume the same level of funding through the first five years, that adds over $200 billion to the price tag of the stimulus.

...

SCHIP, education, state budgets. The floodgates were opened and now the Democratic flood is pouring through. And, as we’ve all learned, once you create a government program, it never goes away. There are emergency measures that FDR passed for the Great Depression that are still in place. The emergency phone tax to fund the Spanish-American lasted 108 years.

The projections that the stimulus will peak in 2010 and slowly decline are pure garbage. Are the Democrats going to cut infrastructure spending and throw construction workers out on the street? Are they going to cut the education budget back to its 2008 levels? Are they going to cut the states off from aide? No, no and no. Once you create a budget line item, you create a constituency who will fight tooth and nail to keep it.

The stimulus bill peaks at a cost of about $300 billion in 2010. If you really want to know how much it’s going to cost, estimate that spending will at least stay at that level and probably rise. That puts the ten-year cost at $3+ trillion. That may sound crazy. But, considering the new budget line items we’re creating, it sounds about right.

God damn, I hate being right all the time. The NYT, the Democrats and Mark Zandi are effectively admitting that the “stimulus” was just an excuse for a permanent sustained increase in discretionary spending.

(Also note that PP funding is not cut in the latest proposal, as the GOP has decided to delay that fight, something that has caused Michelle Bachmann to support a government shutdown. You never thought Michelle Bachmann and the NYT would be aligned on an issue, did you?)

There is nothing wrong with having a serious negotiation over long-term cuts, many of which are reasonable and necessary. It is vitally important, in fact, that the two sides begin examining ways to curb the huge growth in entitlement spending, particularly Medicare. House Speaker John Boehner said last week that he was ready to start that conversation, echoing similar calls from President Obama and many others in Washington.

As Ed Morrissey points out, changes to entitlements are a long term statutory change, not a budget change. Of course, once Medicare cuts are proposed, the NYT will opine against those too, as they have for the last 40 years. And their “solution” to Social Security will be: “Step One. Raise Taxes. Step 2. Raise Spending, Too.”

Left out of this discussion, of course, is that the entire exercise is a result of the Democrats failing to pass a FY 2011 budget in the first place. This was done entirely for political reasons—because the Democrats didn’t want to be branded with the deficit in an election year (how’d that work out?). If the Democrats had done their fucking job and passed a fucking budget, this wouldn’t be an issue. But they didn’t and so the Republicans are refusing to accede to even more discretionary spending increases. For that, they are being branded as “ruthless”.

Mr. Biden and the Senate should make it clear to the freshman House members who are really driving their chamber’s position that they will not permit reckless cuts this year. Then let the freshmen explain to an angry public why they closed the government’s doors to score ideological points.

There’s the “objective” NYT—giving partisan political advice to the Democrats. And what advice it is—shut down the government and then blame the Republicans for it!

Still, we all know that it’s only Fox News that has a political bias. When the New York Times sides with liberals in a political dispute, that’s just them being objective and rational. All objective and rational people are liberal—didn’t you know that?

Update: I would be remiss if I didn’t note that the NYT thinks our economy is too delicate for even the most modest spending cuts ... but is strong enough to let the Bush tax cuts expire.

In those two editorials, you can enclose the entire economic philosophy of the NYT—tax hikes are always good, spending cuts are always bad. It doesn’t matter what the economy is doing. As I said below, what these guys care about is big government. They will use whatever argument is convenient to advocate for it.